Hello Sir, I am N. Raghu Rama Rao, holding NMDC Steel 3500 shares at an average Rs.36.30. Should I hold for long term. What is the future of the company.

Ans: I will prefer a non commodity story which is growing faster. maybe IT, banks or autos

Ans: I will stay away from both.

Ans: Good company, however two overhangs: government owned, thus, dependent a lot on their policies, secondly, operates in a cyclical industry.

Ans: hold it

Ans: NMDC Limited’s (NMDC) operational performance has been very strong, with robust 23%/32% y-o-y
growth in its iron ore production/sales volume in 5MFY24 and seems on track to achieve its guidance
production guidance of 47-49mmt/>50mt for FY24/FY25. The recent commissioning of the Nagarnar
steel plant further improves the iron ore sales volume growth outlook in H2FY24. Long-term volume
growth also remains strong given NMDC’s target to reach 100mt of iron ore production in the next five
years. Additionally, the recent price hike of 7-8% in iron ore price (reflects a recovery in international
iron ore prices) and benefit of operating leverage bodes well for margin. We thus expect NMDC to
clock 12%/15% EBITDA/PAT CAGR over FY23-26E. Valuation of 4.6x/4.1x FY25E/FY26E EV/EBITDA is
attractive and stock offers a healthy dividend yield of 5-6%.

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